K bank launches blockchain-based off-ramp and AML proof-of-concept with Lambda256, KSNET

K bank said Tuesday it has launched a proof-of-concept with Lambda256 and KSNET to test how a bank can operate an off-ramp system within a digital asset-based settlement environment.

Working-level officials from the three companies held a kickoff meeting Monday at Lambda256's headquarters in Gangnam, Seoul, and will conduct a joint pilot over approximately five months. The project aims to verify whether an off-ramp model — one that converts digital asset payment proceeds into Korean won — can be implemented in a real financial institution setting.

An off-ramp is a service that converts virtual assets into fiat currency, such as dollars or won. Interest in off-ramp infrastructure for digital asset payments and settlement has grown alongside increasingly concrete discussions around stablecoins.

The proof-of-concept will test whether a financial institution can actually operate an off-ramp settlement model that converts USDC stablecoin payment proceeds into won. K bank, comprehensive payment services firm KSNET, and Lambda256 — a blockchain specialist and affiliate of Dunamu — will collaborate to verify each company's role and operational framework.

The pilot will use USDC tokens and will cover the full operational workflow: foreign exchange rate application at the time of payment, settlement request generation, AML and fraud detection system verification, payment approval, on-chain settlement execution, and transaction monitoring and suspicious transaction reporting after won disbursement. The three companies also plan to examine factors required in a real operating environment, including operational policy flexibility, the division of responsibilities among participating institutions, and auditability.

K bank, as the core settlement entity, will handle foreign exchange application and won disbursement as well as the overall off-ramp operational framework, including anti-money laundering and suspicious transaction reporting. Drawing on its experience running AML and STR operations, the bank will verify the operational standards required in a real financial institution environment.

KSNET will leverage its existing payment infrastructure to provide stablecoin payment infrastructure and handle won settlement disbursements to merchants. Lambda256 will support on-chain settlement execution through its orchestration platform SCOPE and on-chain compliance platform CLAIR, and will verify the effectiveness of those platforms in a financial institution environment.

Through this proof-of-concept, the three companies plan to comprehensively verify an off-ramp operating model that accounts for the regulatory environment, AML-based risk management, and the transparency of fund flows and settlement efficiency.

K bank is currently conducting a separate stablecoin-based overseas remittance proof-of-concept involving won and local currencies with partners in Thailand and the UAE. The latest pilot extends K bank's stablecoin business into payment verification by demonstrating the settlement process — converting stablecoins into won — that follows a stablecoin payment.

"This project is a meaningful attempt to demonstrate the off-ramp operational capabilities a bank must have in preparation for the institutionalization of digital assets," a K bank official said. "We will continue to build safe and reliable digital financial infrastructure so that we can respond proactively to regulatory changes."

Jung Eui-jung, chief executive of Lambda256, said the key competitive advantage in the digital asset era lies not simply in the technology to use digital assets, but in establishing a framework that allows financial institutions to operate them safely and transparently. "Lambda256 will continue to advance its digital asset operating platform, which connects on-chain execution and compliance through SCOPE and CLAIR, and will lay the groundwork for the financial sector to adopt digital asset services more stably," Jung said.

Park Han-guk, chief executive of KSNET, said complete compliance infrastructure that protects merchants and consumers is essential for digital assets to take stable root in the real payment ecosystem. "Based on the settlement expertise we have accumulated in the existing payments market, we will work with Lambda256 and K bank to successfully demonstrate a trustworthy standard model for digital asset off-ramps," Park said.